KiOR doubles IPO ambitions, to price this week

Updated: Biofuel startup KiOr could raise as much as $241.50 million in an IPO on the Nasdaq, at a maximum offering price per share of $21 for its 11.5 million shares, according to its latest amended S-1 filing. KiOr, which will be listed under the symbol KIOR, estimates that it will price its shares between $19 to $21 per share, and reportedly plans to price its shares for the public market this week.

The new estimated pricing could help KiOr raise more than double the $100 million that it was previously planning to raise in an IPO, filed back in April. At the mid-point of its new pricing range, KiOr has a market value of $2.3 billion.

The four-year-old company has high ambitions to turn wood chips cheaply into a substitute for crude oil, which can then be used by the world’s oil refining industry. KiOr plans to use the funds raised to build up to five plants, the first to be built in Columbus, Miss, which will cost $190 million (Update: KiOR says this first plant is fully funded). KiOR says it will cost $1 billion to build the five plants, which it needs to reach its a production scale of 1,500 BDT-per-day that will deliver a low cost of its biocrude.

However, KiOr is still in the growth and scale-up stage, and isn’t bringing in any revenues and is not profitable. For 2010 KiOr lost $45.93 million, in 2009, $14.06 million, and in 2008 $5.87 million. KiOr also is betting that it will receive a $1 billion loan guarantee from the Department of Energy, and it received a term sheet for that guarantee, but not all companies that receive term sheets for DOE loan guarantees will actually receive the guarantee.

KiOr is the third biofuel company to IPO in recent months backed by investors at Khosla Ventures, Vinod Khosla’s fund, and others included Gevo and Amyris. Amyris and Gevo were in early stages of production as well, and those IPOs were relatively successful. Though, both Gevo and Amyris have been selling traditional biofuels to make up for their lack of revenues in the early stage and KiOr seems like it has been moving too fast to follow that path.

KiOr is different from Amyris and Gevo in that KiOr is largely controlled by Khosla Ventures. Khosla Ventures owns 74.8 percent of KiOr’s Class B stock, and 32.5 percent of its Class A stock, which represents 73 percent of total voting power before the offering.

The most recent S-1 says: “Khosla Ventures will, for the foreseeable future, be able to control the outcome of the voting on virtually all matters requiring stockholder approval, including the election of directors and significant corporate transactions such as an acquisition of our company.” KiOr is officially considered a “controlled company, under The Nasdaq Global Market corporate governance standards,” says the S-1. Khosla Ventures and KiOr even signed a letter of intent in May 2011, that says Khosla Ventures can “build, own and operate commercial production facilities” that use KiOr’s technology in 2015.

So needless to say, Khosla Ventures will make significant money on KiOr’s IPO.